Ivan May Be Less Of A CAT Than Frances

Ivan May Be Less Of A CAT Than Frances

By Mark E. Ruquet And Daniel Hays

NU Online News Service, Sept. 12, 11:21 p.m. EDT?As Hurricane Ivan appeared to be tracking westward an insurance expert estimated that if it stayed on course any damage to Florida would be well below the previous two storms to hit the state.[@@]

Compared with Hurricane Frances, which hit the state last week creating an insured loss that modelers put in the vicinity of $6 billion, Ivan may do damage limited to "hundreds of millions," said Robert Hartwig, executive vice president and chief economist of the Insurance Information Institute in New York.

Mr. Hartwig noted that, as plotted late Sunday the storm would hit the panhandle area of Florida that is a rural low population area.

A loss in the hundreds of millions, Mr.Hartwig, said would not be enough to tap the state's catastrophe fund for insurers, which has a $4.5 billion threshold.

Meanwhile, if Hurricane Ivan does become the third hurricane to strike Florida this year, it would mark an extremely rare weather event, a California risk modeling firm said.

Thomas Larsen, senior vice president for EQECAT, Inc., said if Ivan, which hit Jamaica over the weekend and menaced Cuba Sunday, does hit Florida, it would mark a type of significant weather event that has only a two percent chance of occurring in any year in the U.S.

Should Hurricane Ivan become the third hurricane to strike Florida this year, it would mark an extremely rare weather event, a California risk modeling firm saidThomas Larsen, senior vice president for EQECAT, Inc., said if Ivan, which is on course to strike Jamaica and Cuba over the weekend, does hit Florida, it would mark a type of significant weather event that has only a two percent chance of occurring in any year in the U.S.

Ivan, which has had sustained winds of 145 mph, with wind gusts of 180 mph, would follow Hurricanes Charley and Frances, which hit the state within a few short weeks of one another.

Ivan, a Category 4 storm that some reports suggest could rise to a Category 5 as it enters the Gulf waters, is already a killer storm, taking more than 20 lives as it passed through the Caribbean.

On its predicted path, Mr. Larsen told National Underwriter that all models point to Ivan touching some part of western Florida sometime between early Monday or Tuesday.

"There is not a lot of good news there," he commented.

EQECAT said a similar series of serious hurricane storms hitting Florida have happened only a few times in the last century: 1926, 1933 and 1935.

In 1926, according to EQECAT, three hurricanes struck Florida, including a Category 4 storm, which ripped through what is now Miami-Dade County, and in 1933, another three storms struck Florida.

Two years later, the 1935 "Labor Day" storm hit the Florida Keys and the southern Gulf Coast of Florida. It was one of only three storms since 1900 designated a Category 5 hurricane to strike the U.S. Gulf and Atlantic Coast, EQECAT said.

In 1964, three hurricanes struck Florida, but they were Category 2 storms.

The last Category 5 hurricane to strike the U.S. was Hurricane Andrew in 1992, causing $20.3 billion of insured losses in adjusted 2003 dollars. Its estimated insured losses would be $24 billion if a storm like Hurricane Andrew were to occur now, the modeling firm continued.

The potential insured losses resulting from storms of the sizes which struck early in the last century would be even greater than Andrew since the population of Florida in the 1920s and 1930s was only a small fraction of the current population, EQECAT said.

According to the modeling firm, a computerized re-creation of the 1935 Labor Day storm would today cause insured losses in excess of $60 billion. A re-creation of the 1926 storm that struck Miami would today result in losses exceeding $50 billion.

EQECAT estimates the insured losses for a strike near the Tampa/ St. Petersburg metro area could exceed $35 billion if Ivan continues along its expected path and remains a Category 4 or 5 storm. The firm cautioned that the severity of the hurricane remains uncertain so far away from landfall.

Taken together, the sum of losses from Hurricanes Charley, Frances and Ivan would push the 2004 hurricane insured losses to more than $45 billion for the season beginning in June, making this a one in 50 year loss.

Speaking days before possible landfall in Florida, EQECAT emphasized that many aspects of the storm could change significantly.

Hurricane activity for the first half of the 20th century was much stronger than the second half and some researchers believe we now may be entering another more active cycle, EQECAT said.

EQECAT, founded in 1994, is a division of ABSG Consulting Inc., of Houston.